Crude Climbs To Two-Week High On New Trump Sanctions Of Iranian Oil

The sanctions precede a second round of Washington/Tehran nuclear negotiations: File Image/Pixabay

Oil on Wednesday achieved a two-week high amid global trade tensions and rising U.S. stockpiles, but buoyed by new U.S. sanctions targeting Chinese importers of Iranian oil.

Brent settled up $1.18 to $65.85 per barrel, while West Texas Intermediate settled up $1.14 at $62.47, the highest level of closes since April 3.

The sanctions imposed by Washington targeting exports included a China-based teapot refinery involved in $1 billion worth of Iranian oil trades, and were developed concurrent to Washington relaunching negotiations with Tehran over its nuclear programme (the next round of talks are set for Saturday in Rome).

Also supporting oil was the Organization of the Petroleum Exporting Countries (OPEC) receiving  updated plans for Iraq, Kazakhstan, and other countries for further output cuts to make up for pumping above agreed quotas.

The latest plan requires seven nations to cut output by a further 369,000 barrels per day (bpd) between now and June 2026, with monthly cuts ranging from 196,000 bpd to 520,000 bpd.

However, capping Wednesday's gains was the disclosure from the U.S. Energy and Information Administration that crude inventories rose by 515,000 barrels to 442.9 million barrels in the week ended April 11, compared with expectations for a 507,000 barrel rise.

Meanwhile, the International Energy Agency said global oil demand growth this year will be the lowest since the Covid pandemic decimated demand in 2020.

Also on Wednesday, oil market conditions changing due to U.S. president Donald Trump's tariff initiatives saw Chinese refiners importing record amounts of Canadian crude, after slashing purchases of U.S. oil by roughly 90 percent, and thanks to a pipeline expansion in Western Canada that opened less than a year ago and provided China and other East Asia oil importers with greater access to Alberta's oilsands reserves.

Chinese imports from Canada's west coast soared to 7.3 million barrels in March and are on track to beat that amount in April, while imports of U.S. oil have collapsed to 3 million barrels per month from a peak of 29 million in June, according to Vortexa Ltd.